Benefit Comparison:

Home Equity Loan vs Line of Credit

Closed-End Loan Benefits

A closed-end home equity loan could be a great source of funds for a number of reasons: no change in an existing first mortgage, the possibility of tax deductible interest (consult your tax advisor), low interest rates, no mortgage insurance required, and you can use the loan for any purpose. A Home Equity Loan is the right choice for things like debt consolidation and single-purpose purchases. These purchases could include: automobiles, medical bills, college tuition, and even extra cash.

  • Lower monthly obligations
  • Possible tax deductions
  • Lower interest rates vs. credit cards (learn more)
  • Simple interest vs. compounding interest (learn more)
  • Increase cash flow
  • Fast money
  • Closed-end Home Equity Loan rates vs. Credit Card rates (learn more)

Line of Credit Benefits

As far as consumer loans go, Home Equity Lines of Credit have some of the lowest interest rates and minimum payments. Application and documentation requirements are generally less demanding than traditional first or second mortgages. This makes it easier to qualify. Mortgage insurance is not required on any Home Equity Lines of Credit, thus reducing monthly payments. Interest payments may be tax deductible (consult your tax advisor). Home Equity Lines of Credit may reduce your monthly debt payment if the borrower uses them to pay off existing debts.

  • Definitions of Simple and Compounding interest (learn more)

Disclosures

Rate is for advertised loan. Fees & charges apply. Subject to underwriting approval. Not all applicants will be approved. Minimum credit score of 731 required to be eligible for advertised rate. Full documentation & property insurance required. Loans secured by liens against your property. Consolidating debts may increase the time and /or the total amount needed to repay your debt. Taxes & insurance extra. Terms, conditions & restrictions apply. Your rate and term may vary. Lock in fee required to secure rate. Recent rate but subject to change without notice. Rate available on loan amounts from $250,001 to (A) $417,000 (contiguous US) and (B) $625,500 (AK and HI) on owner-occupied single-family residential properties. Call for details.